The House of Representatives has ordered for the probe oil firms operating in the country on allegations of failure to remit a total of $8.251 billion, as stipulated in the 2022 Nigeria Extractive Industries Transparency Initiative (NEITI) report.
The resolution was passed following the adoption of a motion co-sponsored by Ikenga Ugochinyere, representing Ideato Federal Constituency lmo State and Alhassan Doguwa, representing Doguwa/Tudun Wada Federal Constituency and Kano States respectively on Thursday.
In his lead debate, Ugochinyere informed that the House is displeased that the 2021 Oil and Gas Report disclosed a rise in the number of unremitted revenues to the Federation, amounting to $9.85 billion and a total crude oil and gas revenue of $23.046 billion, indicating a 13 per cent increase from the total of $20.430 billion realized in 2020.
The House is alarmed that, according to the NEITI Report, the unremitted revenues consist of $278.813 million earned by the Federation from trial marketing under the First Exploration and Production JV, $7.61 million from OML 116 operated by the Nigerian Petroleum Development Company, and $5.85 billion in proceeds from the sales of domestic crude oil, including approximately $871.15 million in unremitted crude oil sales.
“The House is saddened that, according to the NEITI Report, 54 companies accounted for a total metered crude oil production of 634.60 million barrels. Out of this, 68.47 million barrels were lost to production adjustments, measurement errors, and theft/sabotage, leaving a balance of 566.13 million barrels.
The Lawmaker who called for the House’s intervention, observed that Section 4(2) of the 1999 Constitution (as amended) empowers the National Assembly to make laws for the peace, order, and good governance of the Federation or any part thereof.
“The House also notes that Order 18 Rule 75(2)(k) of the Standing Orders of the House of Representatives grants jurisdiction over NEITI to the House of Representatives Committee on Petroleum Resources (Upstream).
“The House is aware that Section 4(3) of the NEITI Act provides that NEITI shall cause its report to be presented to the National Assembly for review and debate.
“The House is also aware that the establishment of NEITI in 2004 is part of the government’s overall economic and institutional reforms to ensure transparency and accountability in the governance of Nigeria’s abundant natural resources, which form the mainstay of our economy.
“The House is informed that, by the provisions of the Act, NEITI is to provide crucial facts, recommendations, findings, information, and data required by the government to promote constructive engagements, public debates, discussions, dialogue, and advocacy to push for oil sector reforms.
“The House is cognizant that the 2021 Oil and Gas Report was publicly unveiled and presented on Monday, September 18, 2023, with far-reaching findings and recommendations that are critical to the development of the oil and gas sector.
“The House is also cognizant of the fact that since the enactment of the NEITI Act in 2004, no session of the House of Representatives has ever received and debated the NEITI Report, as required by Section 4(3) of the NEITI Act.
“The House acknowledges that this year’s NEITI Oil and Gas Report presentation is coming at a time when the government needs to block all revenue leakages, grow its income generation opportunities, and retrieve all debts owed to it by oil companies within the sector.
According to him, House is worried that in the NEITI Report, the total outstanding taxes payable to FIRS as of July 31, 2023, amounted to US$13.591 million, while the total outstanding Federation revenue payable to NUPRC as of December 31, 2022, stood at US$8.251 billion.
The House is concerned that for downstream operations, NEITI reported that the volume of PMS imported in 2021 under the Direct Sale Direct Purchase (l arrangement, based on NNPCL’s records, was significantly different from the volume of PMS imported, as per NMDPRA records. This indicates that there is no independent third-party confirmation of product importation volume and subsidy value.
“The House is keenly aware of the need to receive the 2021 NEITI Report,” he narrated.
The House in their resolutions after the debate resolved to mandated the relevant Standing Committees to holistically study, review, and recommend legislative measures concerning NEITI to it.
The House therefore directed the joint Committees on Gas, Petroleum Resources (Upstream and Downstream), and Petroleum Resources (Midstream) to report back within eight weeks for further legislative action.
